U.S. Automakers Worry that Greener Cars May Not Sell

After many years of resisting calls to green their product lines, U.S. auto companies are finally getting the message. The North American International Auto Show in Detroit, which is open to the public Jan. 17-25, is a showcase for environmentally friendly technology. Many of the new cars on the revolving stands are hybrids (including at least two plug-in hybrids) and battery electric cars. The third generation of the Toyota Prius is parked close to an all-electric Smart car.

But interviews with automakers present at the show reveal a profound unease with the industry’s new direction. With gasoline now below $2 a gallon, they’re asking if U.S. customers who have been gravitating back to SUVs really care about the fuel efficiency the new, cleaner models offer. And, with the recession, they say, will consumers be able to pay the higher prices these innovative cars and trucks often demand? One thing lacking at the show was any confident predictions about where the economy and fuel prices will be next year, when the first of the new battery-based vehicles will appear.

“To really ramp up volume, we need a clear energy policy,” said Ford executive board chairman William Clay Ford at a private dinner during the show’s press previews. Without that, he said, “It’s really difficult to plan the volumes for our new models, and to know what product mix to offer.” Ford did not endorse a specific approach for the incoming Obama administration, but he spoke approvingly of the stabilizing effects of a gas tax.

Ford is planning to build a battery electric car based on the Focus for 2011, but it is cautious about how many buyers there might be, and is currently forecasting only 10,000 annually for the global market. General Motors’ plans are led by the innovative Chevrolet Volt, which uses a small gas engine as a generator to extend its battery range. But the expected small initial sales volumes are unlikely to significantly affect the company’s future. The company has also said it could lose money on early production of the Volt.

Chrysler president Jim Press opened his show remarks by assuring the media that the company will not go bankrupt. Then he and his colleagues unveiled a fleet of hybrid and battery cars, from a very fast, battery-powered sports car, the Dodge Circuit, to a Jeep Patriot with a range-extended gas-and-electric system similar to that of the Volt. Chrysler says it wants to build a full range of these cars, but analysts wonder if the financially challenged company has the wherewithal to fully develop them.

Another brave approach to green is being taken by small-volume, luxury automakers Fisker and Tesla. Fisker will start selling its $87,900 plug-in hybrid sports car at the end of this year. Henrik Fisker told Yale Environment 360 that more than 1,000 customers have put down $5,000 deposits, and that the recession—and low gas prices—have so far not dampened demand. Franz von Holzhausen of Tesla said in an interview that the company has delivered 160 of its $109,000 electric roadsters, and is aiming to sell 1,200 cars a year.